What to Do After Inheriting Land in Delaware

When a family member or other party wills land in the state of Delaware, beneficiaries gain an asset but also important property decisions. With Delaware having over 430,000 acres of farmland being actively cultivated while also retaining other natural landscapes like forest acreage or wetlands, inherited land can vary widely in usage potential and value considerations. As USDA data shows Delaware farmland averaging $8,700 per acre in 2023, understanding steps after receiving these assets is key. 

Whether currently leased cropland, vacant residential development sites or protected wetland territory, critical actions like verifying ownership officially via new title deeds, evaluating land worth through formal appraisals and weighing pros/cons of selling versus retaining land should happen promptly. This piece examines core action steps after inheriting Delaware land – spanning from insurance considerations to exploring land sale options locally or through online agricultural property marketplaces, if liquidating the asset makes sense financially or per the inheritor’s broader situation.

Getting Your Bearings After Inheriting Land 

Receiving an inheritance of any kind can be a disorienting experience, especially when it comes to something as valuable yet complex as land. Before making any major decisions, take the time to get fully informed on the land itself as well as your options.

Learn the Specific Details of the Land 

The first thing you’ll want to do is learn everything you can about the land you have inherited in Delaware including:

• Location – What city, county and part of Delaware is the land located in? Be sure you know the precise location and boundaries.
• Type of Land – Is it residential, commercial, agricultural, industrial or undeveloped land? What is the zoning classification and are there any usage restrictions?
• Size – How many acres or square feet of land have you inherited?
• Existing Structures or Resources – Is there a house, out buildings or other existing structures on the land? Is there a water resource like a stream? Are there crops, timber or other valuable resources?
• Accessibility – Is there direct road access to the property or does accessibility need to be established?

Once you confirm all the specifics on the location, type, size and existing resources on the inherited Delaware land, you can begin the process of deciding what to do next. But first...

Handle the Legal Transfer of the Inherited Land 

Before evaluating options or making firm plans for inherited land in Delaware, you first need to ensure the land has been properly recorded in your name through the legal estate transfer process. Here are key steps:

• Work with the estate executor to review the will and confirm you are the legal inheritor of the land identified.
• File documents with the Delaware probate court overseeing the execution of the will to legally record the inheritance and land title transfer to your name.
• Consult with a real estate attorney to understand any specific legal requirements in how the Delaware land transfer must occur. This depends on the type of land, location, will specifics and other factors.
• Pay any inheritance taxes or outstanding property taxes that need to be settled to complete the transfer process.
• Update the property records with Delaware land office to register the land title fully in your name.

Navigating these administrative tasks and legal requirements can be complex when inheriting land in Delaware but it is essential to confirm your ownership rights before proceeding with plans for the land. With the land legally transferred to you, then you can fully explore your options.

Evaluating Your Options with Inherited Land 

Inheriting any type of land whether developed or undeveloped provides you opportunities. Before deciding on a course forward, carefully consider your options:

Hold the Land 

If the Delaware land you inherit has development potential, holds valuable natural resources, or provides reliable rental income from existing structures, holding the land may be the right choice, especially if you inherit at lower tax basis. By retaining ownership of inherited land in Delaware, you can reap future appreciation, develop and improve the land, harvest crops or timber, or collect rental income while owning a hard asset that could later fund your retirement or be passed onto future generations. Make sure to evaluate:

• Appreciation Potential – Get an estimate of what long term 20-30 year returns could be based on location, market growth and type of land inherited. Is it beachfront property or located in an eventual growth corridor that is likely to appreciate over the decades ahead?
• Development Costs – For raw vacant land, estimate costs you’d need to put into the land to improve it like clearing trees, building access roads, surveying, landscaping, adding utilities, etc. before returns on investment could be realized.
• Resource Harvesting – Does the land offer near term returns from timber harvesting, mineral rights, gas/oil reserves, or farming that cash flows to offset expenses while improving it?

If holding the inherited Delaware land checks out from a financial perspective, you can always consider subdividing or selling off smaller portions of land in the future if you need to access equity, while keeping most of the land asset intact over generations.

Sell the Inherited Land 

Alternatively, you may want to consider selling part or all of the inherited land for immediate cash proceeds. Selling land, you inherit in Delaware frees you from the responsibilities of ownership and locks in returns now rather than waiting years down the road for the land to potentially appreciate. Run some numbers around a possible sale:

• Fair Market Value – Get a comparative market analysis from a licensed real estate professional specialized in land valuations to estimate what price the inherited land could fetch on the open market.
• Demand Levels – Gauge buyer demand for that type of land in the local Delaware area and how long it may take to secure a buyer. Target selling when demand and prices are highest.
• Sale Commissions/Fees – Factor in expenses to sell the land like real estate commissions, legal fees, mortgage payoffs, taxes and document preparation which could total 6-10% of sale value.
• Net Proceeds – After costs of sale, calculate proceeds you could net if selling at fair market appraisal value and whether that aligns with financial goals now.

Selling inherited land can make sense to simplify ownership responsibilities or release capital now for other plans if the numbers make sense. Just be sure to get professional guidance to accurately value the land.

1031 Tax Deferred Exchange 

If evaluating selling inherited land in Delaware, make sure to explore if setting up a 1031 exchange could benefit you for tax purposes. A 1031 exchange allows you to sell Delaware land you inherited while deferring capital gains taxes by redeploying proceeds from the sale into another “like-kind” real estate property. By utilizing a 1031 exchange, you can potentially:

• Avoid capital gains taxes which could be 20% or more of sale profits
• Reinvest proceeds from selling inherited land into another property better aligned with your lifestyle and financial goals
• Consolidate a property portfolio for easier long-term management
• Further diversify real estate holdings adding new locations or property types

A 1031 exchange has specific rules and process requirements so be sure to consult with your tax advisor and 1031 intermediary to structure properly. The deferred tax benefits could be invaluable.

Work with a Professional Inherited Land Buyer 

If you decide selling inherited land in Delaware is the best route, instead of listing on the open market consider connecting with a professional land buying company like Land Boss. Working directly with an established land buyer versus listing land for sale provides benefits like:

• Quick All-Cash closing in days not months so you don't have to owner finance
• No need to fix up or enhance land before selling
• Pay no commissions, transaction fees or closing costs
• Close on your timeline shortly after legal inheritance finalized
• Avoid price negotiations and complex contracts
• Sell as-is regardless of issues like oil spills, debris, or no road access

Land Boss purchases all types of inherited, surplus, distressed, rural and unused land across Delaware and pays fair cash offers based on comparable land values. We handle everything from valuation to closing documentation to recording the deed transfer.

Selling your inherited Delaware land directly to Land Boss simplifies the process so you can quickly access fair proceeds while avoiding time consuming listing hassles. Within days after legally inheriting land, we make a cash offer so you can move forward with confidence.

Get Started Now 

With the legal transfer of inherited land fully complete after someone’s passing, the decision of what to do with inherited property in Delaware ultimately comes down to your personal financial situation, lifestyle goals, and life stage considerations. Whether you decide holding long term, selling, executing a 1031 exchange or working directly with an established land buying company like Land Boss, make sure to carefully evaluate all options first.

Most importantly, consult with professionals like real estate attorneys, land appraisers, tax advisors, land management specialists and inherited land buyers to maximize the value of the inherited land. With Delaware being such a business and real-estate friendly state, inherited land can become a prime asset and smart investment in your family’s future. But you need reliable guidance to make the most of this unique opportunity and build upon the legacy of previous generations.

Frequently Asked Questions (FAQs)

Do I have to pay inheritance taxes when I inherit land in Delaware?

No, Delaware does not have a state inheritance or estate tax, so inheriting land in Delaware is tax-free. However, inheritance laws can be complex, so consult an attorney or tax advisor to understand any federal tax obligations.

I inherited vacant land in Delaware. What costs do I need to factor in if I decide to sell it?

Key costs to consider when selling inherited vacant land include legal fees, property taxes, broker commissions if listing with an agent, possible mortgage payoff costs, and other expenses like surveys, deed preparation fees, and title insurance which could total 8-12% of the sale price.

How long does the process take to legally transfer inherited land into my name in Delaware?

It typically takes 4-6 months to fully legally transfer inherited land in Delaware into your name. This involves navigating the probate court process, paying any outstanding taxes, recording the deed transfer documents, and more. An attorney can help expedite the process.

What type of land due diligence should I do after inheriting land before deciding whether to sell or keep it?

Recommended due diligence includes investigating zoning classification, surveying the land, researching market value, inspecting for any contamination or structure issues, confirming accessibility, and researching prior usage to uncover any restrictions or considerations before deciding what to do with inherited land.

Is it better to list inherited land on the open real estate market or sell directly to an established land buying company when I want to sell?

Selling directly to a local land buying company like Land Boss typically nets better terms like all-cash offers, no fees or commissions, and fast 28-42 day closing timeframes versus traditional listing on the MLS which may take months and involves negotiations, showings, contingencies and uncertainties around closing.

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